U.S. Tax Code Favors Traditional Family Structures, Disadvantaging Dual-Earning Couples

The U.S. tax code has long been under scrutiny for its preferential treatment of traditional family structures, particularly those with a single breadwinner and a homemaker, often referred to as the "tradwife" model. This structure is becoming less common as dual-earning couples become the norm in modern society. The tax code's favorable treatment of traditional family structures is evident in various provisions that offer tax benefits to households with a single earner and a dependent spouse.

One of the most notable ways the tax code favors tradwives is through the standard deduction and personal exemptions. Historically, married couples filing jointly have been eligible for higher standard deductions and more personal exemptions compared to single filers or married couples filing separately. This means that a household with a single earner and a dependent spouse can often claim a higher standard deduction and more personal exemptions than a dual-earning couple with the same total income.

Another significant tax benefit for tradwives is the earned income tax credit (EITC). The EITC is a refundable tax credit designed to offset the burden of Social Security taxes and provide an incentive for work, particularly for low- to moderate-income working individuals and couples with children. However, the EITC is structured in a way that provides a larger credit to households with a single earner and a dependent spouse than to dual-earning couples with the same total income.

The child tax credit also favors tradwives. This non-refundable tax credit is designed to offset the cost of raising children and provide an incentive for families to have children. However, the child tax credit is structured to provide a larger credit to households with a single earner and a dependent spouse than to dual-earning couples with the same total income.

The tax code's bias towards tradwives can have significant financial implications for dual-earning couples. For instance, a dual-earning couple with two children and a total income of $100,000 may end up paying more in taxes than a tradwife household with the same total income and two children. This disparity arises because the dual-earning couple may not be eligible for the same tax benefits as the tradwife household, such as the standard deduction, personal exemptions, EITC, and child tax credit.

The tax code's bias towards tradwives is rooted in historical, cultural, and political factors. However, as the number of dual-earning couples continues to grow, there is an increasing recognition of the need to reform the tax code to better reflect the realities of modern family life. Some policymakers have proposed changes to the tax code that would provide more equitable treatment for dual-earning couples, such as increasing the standard deduction and personal exemptions for all taxpayers, regardless of their marital status or family structure. Others have suggested expanding the EITC and child tax credit to provide more support for low- and moderate-income families, regardless of their family structure.

In summary, the U.S. tax code's bias towards tradwives can result in dual-earning couples paying more in taxes than traditional family structures with the same total income. As the number of dual-earning couples continues to rise, there is a growing need to reform the tax code to better reflect the realities of modern family life. Policymakers should consider changes to the tax code that would provide more equitable treatment for all taxpayers, regardless of their marital status or family structure.